As Clinton preps for Asia-Pacific tour, is North Korea capable of reform?

This undated photo released by North Korea's official Korean Central News Agency (KCNA) on July 27, 2012 shows North Korean leader Kim Jong-Un and his wife Ri Sol-Ju reacting after watching a performance by members of the Korean People's Internal Security Forces (KPISF) at Ponghwa Art Theatre in Pyongyang.

By Eric Baculinao, NBC News

BEIJING -- Change in North Korea, and its potential impact on American interests in the Asia-Pacific, is likely to be on the agenda when US Secretary of State Hillary Clinton meets Chinese leaders next month on her region-wide tour.

Is the hermit kingdom, with its nuclear weapons program and a “military-first policy” that prioritizes its 1.2 million-strong army, capable of social reform?

Or is the latest staged-managed imagery from Pyongyang—of a Swiss-educated young leader displaying a stylish wife, giving thumbs up to pop music and promising that the belt-tightening days are over—a sign of a new beginning for the impoverished and isolated nation?

The buzz about North Korea’s tantalizing hints of change has gained currency with the recent visit to China of Jang Song Thaek, the powerful uncle of the new North Korean leader Kim Jung Un, followed by reports that Kim himself is seeking to visit China next month.

China vowed greater support and investment in North Korea’s languishing China-style special economic zones, and urged Pyongyang to let “market” principles guide its moribund economy.

But while signs are pointing to change in Pyongyang, North Korean propaganda was denouncing as “hallucination” any talk of reform, denying that the new leadership is breaking with the past.

Ezra Klein describes the mystery surrounding a woman seen accompanying North Korean leader Kim Jong-un, and new reports that she is his wife, meaning the dictator is no longer on the singles market.

Authoritarian dictatorship As a neighbor and ally, China is sensitive to any shift in Pyongyang’s policy directions that could impact China’s interests. While Beijing provides Pyongyang with massive aid to prevent regime collapse that could cause regional instability, China is opposed to North Korea’s nuclear ambitions.

“I think it’s not possible for Pyongyang to sacrifice its military-first and nuclear arms policies, and that in turn will limit all possibilities for reform,” observed Zhang Liangui, China’s top scholar on North Korea who graduated from Kim Il Sung University in Pyongyang.

“I am not optimistic about reform because Kim Jun Un alone cannot decide, it will be decided by North Korea’s political system which prioritizes the army,” said Zhang, a professor of international strategic research at China’s central school for training communist party officials.

“There is low probability of significant change,” said Daniel Pinkston, Seoul-based senior analyst of the International Crisis Group.

KCNA via AFP - Getty Images

A file picture released by North Korea's official Korean Central News Agency (KCNA) on December 28, 2011 shows Kim Jong-Un and his powerful uncle, Jang Song-Thaek, at the funeral of late leader Kim Jong-Il.

North Korea’s system is “structurally set up as an authoritarian dictatorship…as long as the Kim family is in power it will be extraordinarily difficult to renounce the legacy of his father and grandfather,” Pinkston told NBC News, explaining his group’s latest report analyzing the barriers to reform in North Korea’s militarized society.

Ezra Klein describes the mystery surrounding a woman seen accompanying North Korean leader Kim Jong-un, and new reports that she is his wife, meaning the dictator is no longer on the singles market.

Preventing a Gadhafi-like fate “As long as the Kim family regime is in power, they will not surrender nuclear weapons. But I do not see why this is an obstacle for reforms,” argued Andrei Lankov, a Seoul-based Russian scholar on North Korea who also attended Kim Il Sung University.

“They will keep their nuclear devices, five or ten of them, for the deterrence purposes, just to make sure that they will not suffer the sorry state of Colonel [Moammar] Gadhaf i—while reforming the country if they consider that reform suit their interest,” he told NBC News.

Lankov noted, however, the “destabilizing” effects of reform. ”Sadly, the conservatives might be correct and I will not be surprised if the reforms will bring about a sudden collapse of the North Korean state,” he said, alluding to the examples of East Germany and Tunisia.

“It is still possible to take steps toward the market without giving up the nuclear program, though you would have to limit military spending,” according to Daniel Sneider, associate director for research at the Asia-Pacific Research Center at Stanford University.

But for Sneider, one issue is the challenge posed to Pyongyang’s legitimacy by South Korea. North Korea used to be more prosperous than the South due to pampering by China and the former Soviet Union during the Cold War. But now, the North’s economy is barely three percent of the South’s, with half the population. The majority of North Koreans suffer from food shortages, according to UN reports.

“In the South, there is a wonderful example of a highly successful Korean market economy—the North claims to be morally superior and a purer Korean state, unpolluted by Western capitalism. If they go down the road of market reform, that undermines a central plank of North Korean ideology,” Sneider said.

“The path of reform will be chosen by North Korea but China will certainly provide help,” said Lu Chao, director of North Korea Studies at the Academy of Social Sciences in Liaoning province, which shares a long border with North Korea.

Limited riskLu, who frequently meets with North Korean officials and businessmen from across the border, detects Pyongyang’s new focus on the economy.

“Kim Jung Un is focused on improving the quality of life, this can be seen in his visits to parks and artistic performances, in contrast with his father who prioritized the military,” Lu told NBC News.

At least 169 deaths have been reported in North Korea during the past two months as flooding continues to cover thousands of acres of farmland. NBCNews.com's Dara Brown reports.

“Some reforms are going on in the country, especially in agriculture,” he added, noting that farming reforms will pose “limited risks” to the regime.

For the International Crisis Group’s Pinkston, US policy should remain “deterrence and containment while being observant”.

“The US should monitor, bilaterally and multilaterally, the situation in North Korea, maintain a strong deterrence and containment posture, but be willing, when the opportunity presents itself, to engage North Korea if it changes its policy directions,” Pinkston said.

Clinton is scheduled to visit China Sept 4-5, before becoming the highest-ranking US official to visit East Timor, which gained independence from Indonesia in 2002.

She will later visit the Asia-Pacific Economic Cooperation forum in Vladivostok, eastern Russia.